Hedge Fund Sentiment Is Stagnant On Enzymotec Ltd (ENZY)

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Manatuck Hill Partners. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Tiger Management).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Enzymotec Ltd (NASDAQ:ENZY) but similarly valued. We will take a look at Bonanza Creek Energy Inc (NYSE:BCEI), Xerium Technologies, Inc. (NYSE:XRM), Utah Medical Products, Inc. (NASDAQ:UTMD), and Genie Energy Ltd (NYSE:GNE). This group of stocks’ market valuations are closest to Enzymotec Ltd (NASDAQ:ENZY)’s market valuation.

As you can see, these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $68 million in Enzymotec Ltd (NASDAQ:ENZY)’s case. Bonanza Creek Energy Inc (NYSE:BCEI) is the most popular stock in this table. On the other hand, Utah Medical Products, Inc. (NASDAQ:UTMD) is the least popular one with only 4 bullish hedge fund positions. Enzymotec Ltd (NASDAQ:ENZY) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Bonanza Creek Energy Inc (NYSE:BCEI) might be a better candidate to consider a long position.